Canadian Oil Going By Rail Through Washington To Portland Before Shipping To Asia

In the long run, Canada wants to expand its Trans Mountain pipeline to move oil from the Alberta tar sands west to British Columbia — and from there onto ships that would travel through the Salish Sea and then to Asia.

But that expansion has yet to begin. And oil producers have instead begun shipping that oil by rail to Portland and loading it onto vessels for export.

Portland exported more than 240,000 barrels of oil to China in January, according to a report by Bloomberg.

But it’s far from clear that oil producers see oil-by-rail and the Willamette and Columbia rivers as part of their long-term strategy.

“My read on all this is it can’t be a large new route to get oil to Asia. What this looks like is a test shipment,” said Clark Williams-Derry, who studies energy markets for the Sightline Institute, a Seattle-based think tank.

Williams-Derry said shipping oil overseas through Portland is not economical. It’s likely an attempt to establish a new market.

State regulators say the oil is moving through the Zenith Energy terminal on the Willamette River. The facility was an asphalt plant until four years ago when it was purchased by Arc Logistics and quietly began accepting shipments of crude oil by rail. It was acquired by Zenith in December.

It is the only facility in Portland accepting those Canadian crude shipments and transloading them, Oregon Department of Transportation spokeswoman Shelley Snow said. She said the agency’s hazardous materials inspectors are aware of the shipments and regularly inspect the area.

Train shipments of Canadian oil have been moving through the Northwest since as early as 2015, but the use of those shipments to facilitate exports to China appears to be a new development. Overall, oil train shipments have dipped after reaching unprecedented levels between 2013 and 2015.

A 2016 fiery derailment, crash and spill involving an oil train in the Columbia Gorge town of Mosier, Oregon, generated headlines and raised public awareness about the risks of what critics have dubbed “train bombs” and “rolling pipelines.”